Farmers priced out of market

17 Aug, 2018 10:50 AM
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Dairy farmer are being encouraged to plan for high prices and a hay shortage.
They’re not being pushed out but they’re having to operate in a very, very competitive market.
Dairy farmer are being encouraged to plan for high prices and a hay shortage.

National hay and fodder prices have skyrocketed in recent months, imposing further hardships on farmers dealing with unfavourable seasonal conditions.

Price hikes for cereal hay have been noted in every region in the country, with Gippsland recording the second-highest jump since the start of the year.

Dairy Australia reports prices in the region have risen from an average of $175 a tonne to $442/tonne, marking a 153 per cent increase.

And it’s a similar story in south-west Victoria, where average prices have gone from $150/tonne to $275/tonne, a spike of 83pc.

So are these prices, which are being driven by the unprecedented amount of hay and fodder being transported from Victoria to NSW and Queensland, pushing Victorian producers, who are also in need of feed, out of their own local market?

Australian Fodder Industry Association chief executive officer John McKew said Victorian farmers, particularly those in East Gippsland, were still opting to operate in the market despite fodder becoming extremely difficult to source.

“They’re not being pushed out but they’re having to operate in a very, very competitive market,” Mr McKew said.

He said fodder producers and exporters were mindful of the drought situation, and were doing all they could to make as much stock available as possible.

And he said it had meant the stockpile had not diminished completely, with small parcels slowly becoming available around the state.

“There are reports coming through that there are small amounts of hay and fodder being put onto the market as farmers start to re-assess the stock (feed) they have on hand and consider what their pasture growth will look like with some more warmer weather coming,” he said.

“There’s probably some marginal relief coming out of south-west Victoria, allowing them to look at what they have held onto and potentially release some of that onto the market.”

But he said the supply situation was still low and tight.

“Anything that comes on the market disappears as quickly as it hits,” he said.

Hay seen sitting in sheds across the country was likely already transacted and awaiting delivery.

The unprecedented demand has meant Victorian hay transporters and producers were working around the clock.

Logan Contracting’s Glenn Logan, Ecklin, Vic, said demand for hay had tripled on last year.

Mr Logan’s company was this year sending hay as far as northern NSW, much further than usual.

He had been drawing hay from across Victoria and into South Australia to meet demand.

WestVic Dairy regional manager, Lindsay Ferguson, said late autumn rains this year and the St Patrick’s Day fires had left many farmers without fodder reserves and paying the high prices to feed their stock.

Mr Ferguson said, while the wet winter had laid a good basis for the next hay season, the long-range weather forecast was uncertain about whether good crucial spring rains would arrive.

“We are encouraging people to plan for high prices and a hay shortage,” Mr Ferguson said.

United Dairyfarmers of Victoria (UDV) president Adam Jenkins reiterated the importance of planning.

“People need to start planning now around stock numbers and how many they can carry through,” Mr Jenkins said.

“You don’t want to be caught in six to eight week’s time in a situation where you have too much stock and nothing to feed them.”

He said farmers should contact their local government or Dairy Australia representative to get support with planning if need be, because they did not have to do it alone.

He said UDV was having conversations with state and federal governments about support for Victorian dairy farmers, either in rate relief or irrigated water being released.

Dairy Australia managing director David Nation said it recognised a feed shortage was the last thing the industry needed after a difficult few years.

“But we feel confident in the strength of the dairy community, and the ability to draw on our experience in managing feed shortages and challenging operating environments,” Mr Nation said.

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